Selling ad campaigns: Online algorithms with cancellations

Moshe Babaioff*, Jason D. Hartline, Robert D. Kleinberg

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

48 Scopus citations

Abstract

We study online pricing problems in markets with cancellations, i.e., markets in which prior allocation decisions can be revoked, but at a cost. In our model, a seller receives requests online and chooses which requests to accept, subject to constraints on the subsets of requests which may be accepted simultaneously. A request, once accepted, can be canceled at a cost which is a fixed fraction of the request value. This scenario models a market for web advertising campaigns, in which the buyback cost represents the cost of canceling an existing contract. We analyze a simple constant-competitive algorithm for a single-item auction in this model, and we prove that its competitive ratio is optimal among deterministic algorithms, but that the competitive ratio can be improved using a randomized algorithm. We then model ad campaigns using knapsack domains, in which the requests differ in size as well as in value. We give a deterministic online algorithm that achieves a bi-criterion approximation in which both approximation factors approach 1 as the buyback factor and the size of the maximum request approach 0. We show that the bi-criterion approximation is unavoidable for deterministic algorithms, but that a randomized algorithm is capable of achieving a constant competitive ratio. Finally, we discuss an extension of our randomized algorithm to matroid domains (in which the sets of simultaneously satisfiable requests constitute the independent sets of a matroid) as well as present results for domains in which the buyback factor of different requests varies.

Original languageEnglish
Title of host publicationEC'09 - Proceedings of the 2009 ACM Conference on Electronic Commerce
Pages61-70
Number of pages10
DOIs
StatePublished - 2009
Externally publishedYes
Event2009 ACM Conference on Electronic Commerce, EC'09 - Stanford, CA, United States
Duration: 6 Jul 200910 Jul 2009

Publication series

NameProceedings of the ACM Conference on Electronic Commerce

Conference

Conference2009 ACM Conference on Electronic Commerce, EC'09
Country/TerritoryUnited States
CityStanford, CA
Period6/07/0910/07/09

Keywords

  • Costly decision revocation
  • Knapsack
  • Matroids
  • Online algorithms
  • Selling advertisements

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